Finance tips for home-buying women

CBS.MarketWatch.com

LOS ANGELES (CBS.MW) -- Buying a home -- even a condo or townhouse -- can be daunting for a woman.

Jennifer Openshaw

Finding a lender, qualifying for the loan, investigating the new digs ? it?s worse than household chores!

Yet women are doing it at levels not seen before. As I pointed out in my last column, a rapidly growing number of women are buying homes for themselves.

Women now have the cash, clout and chutzpah to venture out on their own. But using the cash they have wisely is more important for them, since women typically earn less and have less saved than their male counterparts.

Hubby handling

Qualifying for a loan isn?t a piece of cake. What few women realize -- until they face a divorce, husband?s death, or even just a separation -- is that a spouse?s credit and financial problems can haunt them long after the husband is gone.

How can that be? Well, many married women don't establish strong credit records of their own, relying on their husbands to handle finances through the years.

Also, a husband?s debts or joint obligations are often reflected on the wife?s credit record, which can impact her ability to get a loan.

Demand equal credit

One more reason qualifying for a loan can be tough: Many lenders don?t recognize that a woman is entitled to "shared" credit with an ex, which could help her. But a recent change in the law says they must.

"If you are a divorced or separated woman, you are entitled to joint credit with your ex," says Ilyce Glink, author of "100 Questions Every First-Time Home Buyer Should Ask." "The problem is many lenders don?t recognize this. Women must be vigilant in demanding their equal credit."

Getting help

One way to combat these issues is to get help. The US Department of Housing and Urban Development?s HOW initiative -- Homeownership Opportunities for Women -- focuses on increasing the number of female homeowners through its nationwide counseling agencies.

Also, thanks to the Taxpayer Relief Act of 1997, you can withdraw funds from your IRA to pay for a first-time home without being subject to the usual 10 percent withdrawal penalty.

Here are a few tips to help you get started on homebuying:

Clean your credit. Check your credit report before shopping to clean up any blemishes. EquifaxEFX, -0.63%
and Experian are two leading credit reporting agencies.

Take the lender?s view. Remember that your lender cares about two main things: your past history of paying bills on time and whether the home you?re buying is worth the price.

Compare prices. Ask your realtor to conduct a Comparative Market Analysis (CMA). A CMA will tell you what other similar properties are going for in your neighborhood so you can make sure you?re not overpaying.

Shop for rates. Your mortgage broker may recommend a lender he or she has worked with. But that isn?t always the lowest rate.

Also, don?t forget to keep your mortgage debt in check. Ideally, you should spend no more than 28 percent of your gross monthly income on housing expenses. That?ll help you qualify for that home -- and leave room for some real shopping.

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